Note 10 Leases

During 2024, the Company entered into lease agreements for equipment utilized in its manufacturing facility. The Company has determined that the lease agreements are finance leases. There is a $1 buyout option at the end of the lease term which makes it reasonably certain that the Company will exercise this option and purchase the machinery and the details of the purchase option are in line with the criteria of a finance lease.

The ROU asset is grouped with property and equipment. The asset is amortized on a straight-line basis over the life of the underlying asset rather than the lease term due to the purchase options in the lease. The amortization expense is grouped with the depreciation expense of the Company’s other property and equipment. The initial recognition of the finance lease liability was recorded based on the present value of future payments. The interest expense is calculated using the incremental borrowing rate of the Company, and is grouped in the interest expense line on the statement of operations.

The components of operating and finance lease costs are as follows for the years ended December 31:

Schedule of Operating Lease and Finance Lease Costs 

There were no variable payments or material short-term rentals for the years ended December 31, 2025 and 2024.

Supplemental cash flow information related to leases are as follows for the years ended December 31:

Schedule of Cash Flow Information Related To Leases 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

Note 10 Leases – Continued

The following table summarizes weighted average remaining lease term and discount rates as of December 31, 2025 and 2024:

Schedule of Weighted Average Remaining Lease Term 

Future maturities of our lease liabilities are as follows as of December 31:

Schedule of Future Maturities of Lease Liabilities